Is It Crazy to Think Facebook Could Buy 7-Eleven?
By Jackson Lewis on Jun. 26, 2017SEATTLE -- With Amazon’s purchase of Whole Foods Market, the Pandora’s box of acquisitions has been opened. Or at the very least, the rumor mill has started spinning.
Whole Foods appeals to a specific consumer base, and if Amazon really does intend to revolutionize the grocery sector, it might have to buy more of the market to get there.
There’s also Amazon’s competition to consider. Reuters recently reported that Wal-Mart is not likely to make a counter offer for Whole Foods, but there are still plenty of acquisition possibilities. Wal-Mart and other large grocers could start making acquisitions of their own, shoring up their defenses against Amazon’s seemingly inevitable brick-and-mortar growth.
Amazon’s purchase of Whole Foods could also mark a new era of acquisitions in which everything is up for grabs and nothing is off the table, especially when it comes to mixing the worlds of online and brick-and-mortar retail sales. And that's where the rumors come in.
Click through for some of the acquisition possibilities that have been discussed in the wake of Amazon’s surprise Whole Foods Market takeover …
The 7-Eleven network
Forbes contributor Curtis Silver floated the idea that Amazon’s purchase of Whole Foods marks an important step in tearing down the divisions between online and brick-and-mortar retail. “Clearly the online tech world is colliding with the physical, dusty world when an internet company purchases a brick-and-mortar operation at this scale,” Silver said.
To that point, Silver said, if Amazon can buy Whole Foods Market, then why can’t Facebook buy 7-Eleven? The proposal is just Silver exercising his creative imagination, but the potential synergy between the social network and the convenience-store conglomerate is hard to deny. He lays out a future where Facebook is “using your demographic data to create not only the ultimate ad experience, but make sure your brand of tobacco is always in stock. I don’t think Facebook will get into the grocery business like Amazon, but the social network kind of seems to align with the convenience-store model.”
World of pure imagination
Silver didn’t stop at imagining Facebook acquiring 7-Eleven. His article envisioned a new reality where companies purchase brands that may not appear to align with their business model, but instead complement the company’s existing vibe or products.
Silver also said Google may want to buy Sears to fill the legacy retailer with exciting new tech. He said Ace Hardware could be a target for a future Amazon acquisition, and his article included other ideas outside of retail. For instance, what if Disney bought Netflix or if Red Bull bought GoPro? It sounds far-fetched, but so was Amazon buying Whole Foods Market a few weeks ago.
Anyone else?
Wal-Mart isn’t likely to make a bid for Whole Foods, but that doesn’t mean other large grocery players are out of the running. The same Reuters article reporting Wal-Mart’s lack of interest in the natural-food retailer mentioned that “Kroger Co., as well as Target Corp. and Costco Wholesale Corp., have also been identified by analysts as potential bidders for Whole Foods.”
General next
Chuck Grom of Gordon Haskett Research Advisors, thinks Whole Foods Market is just the beginning for Amazon. “The acquisition gives CEO Jeff Bezos a weapon to attract a customer he largely already caters to,” Grom said before continuing that the majority of Amazon Prime members make more than $100,000 per year. “But if the goal is to fully compete against Wal-Mart (and the low-end), then could Dollar General be next on Amazon’s buying list to go after an arguably larger part of the U.S. population?”
Benzinga.com quoted Brandon Fletcher, a Wall Street analyst with Bernstein, who also said Dollar General could be an attractive buying prospect for Amazon.
“Plenty of rural and semi-urban customers still need a dollar store,” Fletcher said. “A nearly national footprint and logistic fit would let Amazon solve [that] final mile.”
Wal-Co
“I heard a rumor out there that Wal-Mart might consider acquiring Costco to offset the Amazon buyout of Whole Foods,” said The Street reporter Ken Goldberg.
Goldberg goes on to clarify that the news is just that, a rumor, and that Costco isn’t likely to be in an ideal position to be bought until 15 to 25 months from now when The Street theorizes that Costco’s assets could dip below $100.
Prime hub
Just because Amazon has made a large brick-and-mortar acquisition doesn’t mean it’s done acquiring tech companies, and Aaron Turner, an analyst at Wedbush Securities, thinks a player in the restaurant delivery market could be next, according to the Chicago Tribune.
“A combination of Whole Foods and GrubHub would give Amazon significant competitive positioning on in-home meal consumption regardless of whether the meal was prepared in-home or at a restaurant,” Turner said.
Kroget
One reader of Morning News Beat, an online retail news source, wrote that Amazon’s entrance into the market could be an opportunity to combine Target’s connection to millennials with Kroger’s grocery offerings.
“Large Kroger Marketplace stores now have thousands of square feet dedicated to furniture, clothing and other nongrocery items, and while they are not doing poorly, they don’t have the millennial heartstrings like the cooler, hipper Target,” wrote Morning News Beat reader Chris Westermeyer. “Target’s grocery woes are well-known—and who does grocery better than almost anyone? Kroger.”